1: if you are using the POD HD > Power amp . 2x12 cabinet: I would reccomend starting with the Pre amp models and turn off the cab modeling. Some people find too much "color" if you don't... but whatever sounds best to your ears is what's "right".

2: Yes, you can plug two inputs in simultaniously, as well as route each differently depending on your needs.

3: there are eight setlists on the HD500/X, I tend to have similar presets with different schemes depending on the situation. i.e.:

Setlist 1: direct recording

Setlist 2: going to powered speaker (full amp/speaker modeling)

Setlist 3: going to a tube power amp and voiced speakers (pre-amps, no cab modeling)

Setlist 4: Dream Rig

this way I can switch as needed quickly if I need to change my rig without trying to write presets in the middle of a performance.

The manuals will instruct you on how to operate the Pod HD500X. If you really want to understand how to get good tones from the Pod HD series, you should start reading this guide:http://foobazaar.com/podhd/toneGuide/